Dive Brief:
- Israeli tech startup Datricks is preparing to beef up its risk management platform after securing $15 million in a recent Series A funding round that included participation from enterprise software giant SAP, according to Datricks’ chief technology officer.
- The platform, which leverages artificial intelligence, is designed to help organizations quickly spot business risks such as fraud and regulatory compliance missteps that can lead to financial losses and reputational damage.
- “These problems are nightmares for CFOs,” Roy Rozenblum, the company’s CTO and cofounder, said in an interview.
Dive Insight:
The investment comes as business-to-business payment fraud is surging, with a heavy impact on corporate revenues, according to recent reports.
A typical organization loses 5% of its revenue to fraud each year, resulting in more than $3.1 billion in total annual losses globally, according to an analysis by the Association of Certified Fraud Examiners.
Another study, conducted by risk management firm Creditsafe, found that just over half of companies are losing more than 30% of their total revenue to fraudulent activities each year.
Datricks, founded in 2019, claims that its platform can detect not just potential fraud activity, but other financial risks, such as human errors and non-compliance with regulations such as the Sarbanes-Oxley Act.
According to Rozenblum, the startup’s software is able to connect to business management platforms like those provided by SAP, Oracle and Salesforce; analyze a company’s day-to-day processes across these systems; and flag any anomalies that occur.
In July, SAP announced that it was recognizing the platform as an “SAP endorsed app” as part of an expanded partnership with Datricks.
Under the deal, SAP has agreed to promote the tool and is allowed to receive some of the revenues generated by it, Rozenblum said.
“We see a very big opportunity here,” he said.
The startup’s new infusion of cash will be used to strengthen its platform, extending the use of AI and large language models to “go beyond anomaly detection and advanced analytics to fully automated audits,” according to the technology chief.
He said Datricks will also use the funds to hire “seasoned sales engineers with deep finance and tech knowledge.”
SAP joined venture capital firms Team8 and JVP in the $15 million funding round. Team8 was the lead investor.
As part of the investment, Gero Decker, general manager of SAP Signavio, will join the Datricks board, according to a LinkedIn post last week by Gadi Krumholz, a corporate development executive at SAP.
Datricks currently has 25 employees, a spokesperson said.
SAP did not immediately respond to a request for comment.
